Choose whether your fantasy world is an alternate version of Earth or a different planet. The alternate Earth -- or "alternate reality" -- setting is where the world generally has the same geography, but something happened at a critical point in history to cause a noticeable change. The change could be minor or drastic, limited only by your imagination. Alternate versions of the characters may appear in stories where there is travel between different realities.
Describe the world's geography. Consider placement of major continents, oceans, mountain ranges and other features. On an alternate Earth, cataclysmic events may have caused geographical changes. For example, California may be a large island due to seismic activity, or there may be a crater in place of Paris. Geography plays a large role in story development, and is therefore a critical point of consideration.
Describe the seasons. The four seasons are standard throughout fantasy fiction, but as the writer, you can create seasonal variations that you would never see on Earth. Planetary tilt, wobble and orbit all play roles in the severity of seasonal weather. Consider how your story will be affected by minimal seasonal change, as opposed to severe change.
List natural resources and where they are found. Farmland, minerals, precious gems and metals affect societal structure in fantasy worlds. Trade and politics develop to address the need for resources. Your characters' lives and livelihoods will be affected by the distribution of resources.
Determine the level of technology in your world. It can be prehistoric, iron age, modern, futuristic or a logical fusion of two or more ages. You may choose to create a device, or range of devices, unique to your world.
Describe the form(s) of transportation in your world. Horseback, on foot and sailing boats are common modes of transportation, but you are not limited to those, even in low-tech settings.
Describe other relevant technology. Long-distance communication, medical science and other technological advancements are factors in fantasy stories. Imagine what capacities and limits affect the people of your world. Perhaps you will create something that no one has ever envisioned. These are elements that will enrich your world and pull your readers in for more.
Determine the occurrence of magic, if it exists in your world. Magic may be inherent in everyone, half the population, or very few. Some fantasies have a heavy reliance on magic, while others employ it sparingly.
Describe the source of magic. It may come from the souls of rare individuals, be imbued in the environment, lie in the power of words, or it may come from an unexpected source. Perhaps it is limited to a select few talismans. Whatever the source, it will influence the strength and type of magic that may be performed.
Describe the role of magicians in your world. They may be popular or reviled in general society. Magicians' popularity may depend on which region they travel. Many fantasies assign magicians a class of their own, generally above that of the average citizen. Other fantasies pit magicians against rulers who outlaw them. Class levels may also be assigned by a magician's adeptness at their craft.
Create a history. It need not be extensive, but it should explain why things are the way they are. Traditions are based upon history, as are attitudes and society's class system. For example, consider what kind of history might lead to a matriarchal society.
Develop a leadership system. There is no rule that you must have kings or queens in your fantasy world, but it is worth remembering that readers tend to love the notion of royalty. Create a system that will fit your world and its stories.
Determine gender roles. Traditional roles may be enforced or shattered. Decide whether the roles in your society are steadfast, or whether there is flexibility. Consider the reaction in various societies to a woman who wants to be a soldier.
Describe the social castes. Class divide can be narrow, but it is usually wide. An individual's class is generally determined at birth. Advancement may or may not be an option. Consider what may cause someone to become an outcast and what the social consequences would be. Twists on these concepts can add depth to a world's culture.
Establish an economic system. Trade and taxes are realities every reader can understand. Create a system appropriate to the level of technology in your world. Coin-based systems are common in fantasy worlds with lower tech levels. Taxation and the availability of goods have profound effects on people in all worlds.
Describe the religious and philosophical beliefs in your world. These may play large roles, or they may be of little consequence. Villains often take advantage of regional beliefs in order to accomplish their goals. Likewise, the heroes and heroines set out on their adventures with ideals reflecting their own beliefs. This may become the major driving factor of a story.